My last newsletter asked the question of what effect did the home buyer government stimulus money have?
My answer was I thought that the short term impact was huge. But I was really curious about what the long term impact was going to be.
And I concluded last time we’re really just in a wait and see mode to fully assess the impact.
And now we have waited…and now we can see. From the graphs, I would say that the tax credit worked, sort of. There is a definite bubble of activity that happened in April, but it was followed by a depression in July. And now, most indicators are pointing to being roughly the same as last year.
Therefore, what I thought might happen did appear to come true. People who were thinking of buying rushed their decisions, and bought early. Which did reduce inventory temporarily, but the after effect lull caused that figure to return.
I think the benefit of the credit, and a reason to do something similar again was to give 1st time buyers some cash to make repairs that are needed on many of the foreclosed homes that are dominating the market at the moment. But I could just as easily argue that the effect of that is probably not worth the cost of the entire program.
A different program that targeted foreclosed homes, and provided extra money to make them livable would be more likely to help. There are loan programs that are designed to do this, such as the FHA 203k loan, but the regulation and requirements for this particular loan can be a challenge to qualify for. I guess what I would like to see is a more streamlined method to borrow home improvement/repair money and incentives to do so. Especially for houses that will be primary residences.
I am looking at the affordability of a first time buyer buying a condo in Ashland that is listed at $175,000 with a $10,000 credit from the seller offered. It is close to making sense to buy even with home owner association fees at $175 a month. The 4.5% interest rate, and 20% down have the monthly payments after tax benefits around $700 a month…add the homeowners fee and the payment is about $875 a month.
The rent on this place is appoximately $850 a month.
So here is a chance for an Ashland first time buyer to own a place for just over what it would cost to rent it….plus get the benefit of equity building…
The following information came from my website’s financial calculator. It is a useful tool if you want to figure out your own financial tax benefits.
When determining your tax benefits, you need to gather together quite a bit of information. Among the pieces of information you will need are:
- The current value of your home
- The number of years before you plan to sell the home
- The amount of your loan
- The interest rate on your loan
- The length of your loan
- The number of points applied to your loan
- The closing costs when you purchased the home
- The annual taxes for the property
- The annual insurance for the property
- The PMI rate
- The Federal tax rate
- The State tax rate
- The amount of your deductions
After plugging in all of this information, you can determine the tax benefit of your home, which will help you determine the amount you are really paying for your mortgage each month.
If your home has a value of $175,000.00, for example, and you take out a loan for $140,000.00, your total monthly payment may come out to $826.03 (after considering all of the other factors described above). Due to the savings you will receive from your tax benefit, however, your average payment will be $709.77 during the first 5 years. If you’ll decide to live in your home after this period, you will only pay $702.22 per month in average.
The information in this blog is provided courtesy of Jamie Baker, now of Ticor Title. It is mainly taken from an email that she sent out to Realtors in Ashland. But it is very good information.
2008/2009 Taxes have rolled for Jackson County!
(Ashland taxes have gone down!)
I just wanted to let you know that the 2008/2009 tax values are now available from the County.
You may be surprised to learn that the Ashland taxes actually went down this year. This is due to the fact that the 07/08 taxes included a bond for the schools. Most accounts will see a decrease by a couple hundred dollars, but it has to do with the assessed value of the property itself.
I know a lot of you may be asking if you will see a decrease in your taxes because the property values are declining. The answer to that question in a nutshell is “NO”. Here’s why:
· When Measure 50 was approved by voters in 1997, a MAV, or Maximum Assessed Value was established for each property. That value was calculated for each property by subtracting 10% from the property’s 1995-96 Real Market Value (RMV). Under Measure 50, property tax is based on the lower of either the RMV or the MAV.
· The MAV increases by 3% each year as long as the Real Market Value of the property is greater that the MAV. As always, the Real Market Value changes with the real estate market.
· Since 1997 the real estate market (and Real Market Value) has seen unprecedented growth while the MAV has continued to go up the constitutional 3% per year. This has caused the MAV to remain much lower than the Real Market Value, ranging from 35% to 65% of the RMV, with the average property’s MAV being 52% lower than the RMV. The Real Market Value would have to drop by 52% before the taxes would be affected.
Per the County’s calculations, the changes in Real Market Value for the 08/09 year are as follows:
ASHLAND -11 TO 13%
PHOENIX/TALENT -9 TO 12%
EAST MEDFORD -18-21%
WEST MEDFORD/APPLEGATE -17 TO 24%
CENTRAL POINT/SAMS VALLEY -17 TO 20%
ROGUE RIVER AREA -9 TO 14%
NORTH COUNTY -7 TO 11%
(The information above was shared with us(Ticor Title) by Dan Ross, the County Assessor.)
MARK YOUR CALENDAR:
TAXES ARE DUE BY NOVEMBER 15TH, BUT THIS YEAR THE 15TH FALLS ON A SATURDAY, SO THE PAYMENT MUST BE IN BY MONDAY, THE 17TH. If you pay in full by the 17th, you will receive the 3% discount.